The 44-year-old 15-member Economic Community of West African States (ECOWAS) has unveiled the final roadmap to operate a single currency regime by January 2020.
At the ordinary session of the bloc in Abuja, it approved ECO as the name of the single currency.
ECO, similar to euro of the European Union (EU), if adopted as single currency would be an achievement in addition to the free movement of peoples across the borders over the years without any visa requirement or sometimes without passports needed, other than any valid identification.
Today and for many years, the ECOWAS countries have the same international passport with assigning countries indicated on the back of the booklet. That has been a major landmark.
However, goods have been moving, but with a lot of restrictions and undermining rules created by countries in violation of the ECOWAS agreement, which allows movement without tariffs and duties.
The June 29, 2019 agreement at the 55th Ordinary Session in Abuja of the Authority of ECOWAS Heads of State and Government on ECO, after 20 years in the mill, might be a fillip to trade hiccups.
French-Speaking Niger’s President Mahamadou Issoufou, was also elected as Chairman of ECOWAS to fast-track the realization of the 2020 target date for the single legal tender.
Issoufou is one of the eight French-speaking ECOWAS members that have had a single currency, the West African CFA franc and might be a good driver of the sub-regional process.
CFA franc already existed to facilitate economic integration among countries which use the common currency, but English-Speaking countries have had to postpone four times since 2004, efforts to realize same initiative.
Mr. Mustapha Suleiman, Nigeria’s Permanent Secretary, Ministry of Foreign Affairs, said the session instructed ECOWAS Commission to work with West African Monetary Institute and the Central Banks to accelerate the implementation of the revised roadmap with regard to the symbol of the single currency.
This is coming when July 7, 2019 is set as deadline for the take-off of African Continental Free Trade Area (AfCFTA) designed to create a single continental market for goods and services, with free movement of persons and investments as well as significantly expand intra-African trade.
“The single currency can help address West Africa’s monetary problems, boost investors’ confidence and promote trade within the sub-region,’’ President Muhammadu Buhari, who hosted the Session in Nigeria, noted as he promised to sign the AfCFTA agreement after initial decline.
Notwithstanding the notable pitfalls, including exchange rate determination, debt repayment and disruption to international treaties of countries, Niger’s President Mahamadou Issoufou, said there is “a real firm political will” to step up efforts ahead of the scheduled January 2020 deadline.
“We are of the view that countries that are ready will launch the single currency, and countries that are not ready will join the programme as they comply with all criteria,” Issoufou said.
According to the criteria, central banks in each country will carry out “debit-financing less than 10% of the previous year’s tax revenues; ensure single-digit inflation of 5 percent or less; consolidation of a customs union; at least three months’ import cover from gross external reserves; and the liberalisation and promotion of regional trade.’’
Mr. Eze Onyekpere, head of the Centre for Social Justice in Abuja, said he was skeptical about the single currency actually becoming a reality in the foreseeable future.
“Even to this day, you get the sense that Nigerians want to hold onto the Naira; Ghanaian to cedi; and French countries to theCFA.
“There are other reasons for scepticism, especially in Nigeria, which uses the naira. West African countries are very different. Nigerian entrepreneurs are very dynamic. They don’t want anything that can interfere with their production,’’ he said.
But Prof. Abdulgafar Ijaiye of Department of Economics, University of Ilorin, said: “If we go by the principle of economic integration, I do not see anything wrong with it. Other countries have done it, typically Europe.’’
“The biggest advantage of having single currency is that it allows for easy transactions across borders. If we have a single currency, I can move into Ghana and other participating countries without having to go to a bureau de change to look for the currency of the country I want to transact business in,’’ he said.
Mr. Gboyega Isiaka, a Chartered accountant and Financial analyst, said: “ It is not a bad idea for West African countries to have a single currency. What we are talking about here is an opportunity to have a larger economy to trade without currency barriers.
“The whole essence is that we do not have to worry anymore about the change of currency.’’
Prof. David Aworawo of Department of History and Strategic Studies, University of Lagos, said: “ I don’t support dropping our naira because it is our symbol of sovereignty. I think our naira and the ECOWAS currency (ECO) can be spent side by side.’’
The Head of ECOWAS National Unit in Nigeria’s Ministry of Foreign Affairs, Mr. Musa Nuhu, assured Nigerians that the issue would be handled by technocrats, especially the Central Banks.
“Because when we are talking about the currency, you are talking about the lifeline of a country, you are talking about the heartbeat of a country, because it is something that has to do with fiscal and monetary policies,” he said.
MM/GIK/APA